Saudi Arabian Economy Essay

Published: 2020-02-14 04:00:27
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Category: Arab

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Saudi Arabia is one of the richest countries in the Middle East. It is known to have the largest amount of oil reserves in the world and it is the largest producer of oil in the world. Oil, Black Gold as it is called today is one of the most precious commodities in the world and everyone knows that in a few decades oil is going to run out. Many companies in the world are making vehicles and machinery that uses alternative forms of energy to lessen our dependence on oil.

The kingdom of Saudi Arabia also knows that and so the kingdom is investing a lot of money into developing other industries and lessening its dependence on oil. However, the major source of income or money to the kingdom remains to be oil. 75% of the budget revenues come from oil. 45% of the GDP and 90% of the export earnings also come from oil. The proven oil reserves in Saudi Arabia are over 262 billion barrels and they export around 8 million barrels a day.

The King and his family are the main rulers of the country and the family members take up most positions. Off later, there is resistance in the country because of the many foreigners living there, however, the foreigners are invited and paid handsomely for their work because they are there helping the economy exploit the natural resources of energy and develop new industries.

Saudi Arabia has a population of 27 Million, but most of the population is young, the median age is around 21 years. The GDP is 264 Billion and GDP based on PPP is 338 Billion. The economy is growing at a healthy 6.1% yearly. The average GDP is over $10,000 and that makes them a rich country. However, most of the wealth is in the hands of the kings family and there is a lot of disparity amongst the population.

However, in spite of all this there is a 13% official unemployment rate and over a third of the people working Saudi Arabia are foreign nationals. This is the reason for the recent up surging and violence against the foreigners.

Based on 2004 data from the CIA website, the major export partners of Saudi Arabia are US 18.2%, Japan 14.9%, South Korea 9.5%, China 6.1%, Taiwan 4.5%, Singapore 4.1%; over 90% of the exports are petroleum products. The major import partners are US 15.3%, Japan 9.8%, Germany 8.1%, China 6.6%, UK 5.7% , the import products are machinery and equipment, foodstuffs, chemicals, motor vehicles, textiles.

The Saudi riyal has been constant against the US$ at 3.75 and the last 5 year exchange rates have been as follows: 3.747 (2005), 3.75 (2004), 3.75 (2003), 3.75 (2002), 3.75 (2001). The economy is growing and the prospects are great for Saudi Arabia in the coming years. Although the reliance on oil is something that will pull back the economy, the fact that billions of dollars are being poured into developing other industries will help the economy grow and take care of the citizens there.

References

EIA Country Briefings http://www.eia.doe.gov/emeu/cabs/saudi.html retrieved on 23rd Sept06

Wikipeadia Saudi Arabia http://en.wikipedia.org/wiki/Saudi_Arabia retrieved on 23rd Sept06

BBC World http://news.bbc.co.uk/2/hi/middle_east/country_profiles/791936.stm retrieved on 23rd Sept06

CIA https://www.cia.gov/cia/publications/factbook/geos/sa.html retrieved on 23rd Sept06

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